At an EGM next month, shareholders in gas company Metgasco are being asked to choose between voting the company's largest shareholder off the board, or voting off three of the other four directors. Or indeed, they could vote for all resolutions and leave the $24 million company almost entirely rudderless, apart from one very new board director who has so far managed to avoid the fray.
M&A Advisory's Andrew Purcell joined the Metgasco board in highly contentious circumstances two years ago. But it seems the differences between him and chairman Alexander Lang didn't abate. In an extraordinary memorandum to shareholders lodged on the ASX, most of Metgasco's board – including Lang, Philip Amery and Keybridge Capital representative John Patton – urge shareholders to turf Purcell out, saying Purcell's actions while on the board have shown him to be acting in his own interests and not in those of the broader company.
Specifically, the board accuses Purcell of having breached the company's "negotiations protocols" in relation to significant transactions with third parties. We understand this is a reference to Metgasco's dealings with Byron Energy, to which Metgasco loaned money and in which it has a large stake.
Metgasco's board also accuses Purcell of having not explained or answered questions about possible associated interests. This is in response to some unusually large transactions that occurred on the Metgasco register in December last year. One party buying up shares was Twinkle Capital, which has in the past been an associated entity of Purcell but isn't disclosed as one any more. Metgasco's memorandum accuses Purcell of refusing to answer questions about this. Mind you, we are not unaware of the irony that one of those making the accusation on the board is the representative of Farooq Khan's Keybridge Capital, which has had similar accusations levelled against it by the Takeovers Panel last year (it is contesting them).
For his part, Purcell has made no public response to these allegations, though we expect one is only days away.
Purcell, through M&A Advisory, owns 19.2 per cent of Metgasco. Entities associated with Khan and Keybridge own 18.7 per cent. And we understand Geoff Wilson's Wilson Asset Management also has a stake, well below the 5 per cent threshold.
MEL Price at posting:
5.7¢ Sentiment: Hold Disclosure: Held
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